Kandi (KNDI) to Acquire EV Motor, Parts Manufacturer Scrou
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Kandi Technologies, Corp. (Nasdaq: KNDI), has entered into a Share Exchange Agreement to acquire Yongkang Scrou Electric. Co., Ltd. ("Scrou"), a leading Chinese manufacturer of motors and related products for Electric Vehicles (EVs), by acquiring all of the outstanding capital stock of KO NGA Investment Co., Ltd. ("KO NGA"), a British Virgin Islands Corporation and the sole owner and shareholder of Scrou. Scrou is the only operating entity of KO NGA. No closing date has presently been scheduled.
Located in Qiaoxia Industrial Zone of Yongkang City, Zhejiang Province, Yongkang Scrou Electric Co., Ltd., specializes in the manufacture of a variety of automobile generators and motors for pure EVs, as well as auto starters, auto asynchronous motors, auto air-conditioners and other auto related products. Scrou holds several international recognized verification certificates, including ISO9001-2000 and ISO / TS16949. Its driving motors and auto air-conditioning systems are essential components for pure electric vehicles and the auto industry.
Before entering into the Agreement, Kandi conducted usual due diligence on Scrou, including its land use rights, fixed assets and inventories, etc., and reviewed an evaluation report by an independent third party valuation firm which reports the net asset market value of Scrou is RMB 50,052,387.66 (approximately $7,952,524) as of November 30th, 2011. Scrou had no debts other than account payables and receivables incurred in the ordinary course of business.
According to the Agreement, Kandi will exchange a total of 2,354,211 shares of the Company's common stock, representing an aggregate exchange purchase price of RMB 50,052,387.66 (approximately $7,952,524) for the 253 shares of KO NGA, representing 100% of the issued and outstanding shares of KO NGA. The exchange purchase price was based upon the evaluation report. Upon consummation of the share exchange transaction, Scrou will become a wholly-owned subsidiary of Kandi.
Based upon Scrou's three-year business plan, Scrou expects to produce 70,000 units of driving generators for pure EVs, 70,000 units of auto air-conditioners for pure EVs and 390,000 units of auto generators for the years 2012 to 2014. The estimated total revenue and net profit for the three years in aggregation is expected to reach RMB 437,400,000 (approximately $69,428,571) and RMB 57,159,000 (approximately $ 9,072,857), respectively. All these estimated amounts are non U.S. GAAP numbers. The Company is unable to provide the comparable U.S.GAAP numbers at this time, but does not expect the variation from these numbers to be significant.
Located in Qiaoxia Industrial Zone of Yongkang City, Zhejiang Province, Yongkang Scrou Electric Co., Ltd., specializes in the manufacture of a variety of automobile generators and motors for pure EVs, as well as auto starters, auto asynchronous motors, auto air-conditioners and other auto related products. Scrou holds several international recognized verification certificates, including ISO9001-2000 and ISO / TS16949. Its driving motors and auto air-conditioning systems are essential components for pure electric vehicles and the auto industry.
Before entering into the Agreement, Kandi conducted usual due diligence on Scrou, including its land use rights, fixed assets and inventories, etc., and reviewed an evaluation report by an independent third party valuation firm which reports the net asset market value of Scrou is RMB 50,052,387.66 (approximately $7,952,524) as of November 30th, 2011. Scrou had no debts other than account payables and receivables incurred in the ordinary course of business.
According to the Agreement, Kandi will exchange a total of 2,354,211 shares of the Company's common stock, representing an aggregate exchange purchase price of RMB 50,052,387.66 (approximately $7,952,524) for the 253 shares of KO NGA, representing 100% of the issued and outstanding shares of KO NGA. The exchange purchase price was based upon the evaluation report. Upon consummation of the share exchange transaction, Scrou will become a wholly-owned subsidiary of Kandi.
Based upon Scrou's three-year business plan, Scrou expects to produce 70,000 units of driving generators for pure EVs, 70,000 units of auto air-conditioners for pure EVs and 390,000 units of auto generators for the years 2012 to 2014. The estimated total revenue and net profit for the three years in aggregation is expected to reach RMB 437,400,000 (approximately $69,428,571) and RMB 57,159,000 (approximately $ 9,072,857), respectively. All these estimated amounts are non U.S. GAAP numbers. The Company is unable to provide the comparable U.S.GAAP numbers at this time, but does not expect the variation from these numbers to be significant.
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